Stephen John S.

Santos
A.B. Pol. Sci.

Brotherhood Labor Unity Movement of the Philippines vs. Zamora, 147

SCRA 49
Facts: Petitioners, worked exclusively at the San Miguel Parola Glass Factory
averaging about seven (7) years of service at the time of their termination, worked
as "cargadores" or "pahinantes" at the SMC Plant loading, unloading, piling or
palleting empty bottles and wooden shells to and from company trucks and
warehouses.
The petitioners first reported for work to Superintendent-in-Charge Camahort who
issues job orders, were issued gate passes signed by Camahort and were provided
by the respondent company with the tools, equipment and paraphernalia used in the
loading, unloading, piling and hauling operation.
Work in the glass factory did not necessarily mean a full eight (8) hour day for the
petitioners. Work, at times, exceeded the eight (8) hour day and necessitated work
on Sundays and holidays. For this, they were neither paid overtime nor
compensation for work on Sundays and holidays. Petitioners were paid every ten
(10) days according to the number of cartons and wooden shells they were able to
load, unload, or pile. The pay check is given to the group leaders for encashment,
distribution, and payment to the petitioners in accordance with payrolls prepared
by said leaders.
When any of the glass furnaces suffered a breakdown, making a shutdown
necessary, the petitioners' work was temporarily suspended. Thereafter, the
petitioners would return to work at the glass plant.
In January 1969, the petitioner workers organized and affiliated themselves with
the petitioner union and engaged in union activities. They pressed management,
airing other grievances such as being paid below the minimum wage law, inhuman
treatment, being forced to borrow at usurious rates of interest and to buy raffle
tickets, coerced by withholding their salaries, and salary deductions made without

their consent. However, their gripes and grievances were not heeded by the
respondents.
The petitioner union filed a notice of strike with the Bureau of Labor Relations in
connection with the dismissal of some of its members who were allegedly
castigated for their union membership. Despite conciliation conferences, San
Miguel refused to bargain with the petitioner union alleging that the workers are
not their employees.
On February 20, 1969, all the petitioners were dismissed from their jobs and,
thereafter, denied entrance to respondent company's glass factory despite their
regularly reporting for work. A complaint for illegal dismissal and unfair labor
practice was filed by the petitioners.
Respondents moved for the dismissal of the complaint on the grounds that the
complainants are not and have never been employees of respondent company but
employees of the independent contractor; that respondent company has never had
control over the means and methods followed by the independent contractor who
enjoyed full authority to hire and control said employees; and that the individual
complainants are barred by estoppel from asserting that they are employees of
respondent company.
The petitioners strongly argue that there exists an employer-employee relationship
between them and the respondent company and that they were dismissed for
unionism, an act constituting unfair labor practice.
Issue: Whether or not an employer-employee relationship exists between
petitioners-members of the "Brotherhood Labor Unit Movement of the
Philippines" and respondent San Miguel Corporation.
Held: Yes. In determining the existence of an employer-employee relationship, the
elements that are generally considered are the following: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal;
and (d) the employer's power to control the employee with respect to the means
and methods by which the work is to be accomplished. It is the so-called "control

test" that is the most important element (Investment Planning Corp. of the Phils. v.
The Social Security System, 21 SCRA 924; Mafinco Trading Corp. v. Ople, supra,
and Rosario Brothers, Inc. v. Ople, 131 SCRA 72).
Applying the above criteria, the evidence strongly indicates the existence of an
employer-employee relationship between petitioner workers and respondent San
Miguel Corporation.
Uncontroverted is the fact that for an average of seven (7) years, each of the
petitioners had worked continuously and exclusively for the respondent company's
shipping and warehousing department. Considering the length of time that the
petitioners have worked with the respondent company, there is justification to
conclude that they were engaged to perform activities necessary or desirable in the
usual business or trade of the respondent, and the petitioners are, therefore regular
employees. In fact, despite past shutdowns of the glass plant for repairs, the
petitioners, thereafter, promptly returned to their jobs, never having been replaced,
or assigned elsewhere until the present controversy arose. The term of the
petitioners employment appears indefinite. The continuity and habituality of
petitioners' work bolsters their claim of employee status vis-a-vis respondent
company.
Firmly establishing respondent SMC's role as employer is the control exercised by
it over the petitioners - that is, control in the means and methods/manner by which
petitioners are to go about their work, as well as in disciplinary measures imposed
by it.
Because of the nature of the petitioners' work as cargadores or pahinantes,
supervision as to the means and manner of performing the same is practically nil.
More evident and pronounced is respondent company's right to control in the
discipline of petitioners. Documentary evidence presented by the petitioners
establish respondent SMC's right to impose disciplinary measures for violations or
infractions of its rules and regulations as well as its right to recommend transfers
and dismissals of the piece workers. The inter-office memoranda submitted in
evidence prove the company's control over the petitioners. That respondent SMC
has the power to recommend penalties or dismissal of the piece workers, even as to

Abner Bungay who is alleged by SMC to be a representative of the alleged labor

contractor, is the strongest indication of respondent company's right of control over
the petitioners as direct employer.
Dy Keh Beng vs. Intl Labor and Maritime Union
FACTS:
A charge of unfair labor practice was filed against Dy Keh Beng, a
proprietor of a basket factory, bydismissing Solano and Tudla for their union
activities.Dy Keh Beng contended that he did not know Tudla and Solano was not
his employee because the lattercame to the establishment only when there was
work which he did on pakiaw basis.Dy Keh Beng countered with a special
defense of simple extortion committed by the head of the labor union.
ISSUE:
W/N there existed an employee-employer relation between petitioner and respondents
HELD:
Yes. Evidence showed that the work of Solano and Tudla was continuous
except in the event of illness,although their services were compensated on
piece basis. The control test calls for the existence of the right tocontrol the manner
of doing the work, not the actual exercise of the right considering that Dy Keh
Beng is engagedin the manufacture of baskets known as kaing, those working
under Dy would be subject to Dys specificationssuch as the size and quality of
the kaing. And since the laborers are done at Dys establishments, it
could beinferred that Dy could easily exercise control upon them.As to the contention
that Solano was not an employee because he worked on piece basis, the court
ruledthat it should be determined that if indeed payment by piece is just a
method of compensation and does not definethe essence of the relation. Payment
cannot be construed by piece where work is done in such establishment so asto put
the worker completely at liberty to turn him out and take it another at
pleasure Justice Perfecto also contended that pakyaw system is a labor contract
between employers and employeesbetween capitalists and laborers.Wherefore, the
award of backwages is modified to an award of backwages for 3 years at
the rated of compensation the employees were receiving at the time of dismissal.

Jose Sonza vs. ABS-CBN

Facts:
In May 1994, respondent ABS-CBN Broadcasting Corporation (ABS-CBN)
signed an Agreement (Agreement) with the Mel and Jay Management and
Development Corporation (MJMDC). ABS-CBN was represented by its corporate
officers while MJMDC was represented by SONZA, as President and General
Manager, and Carmela Tiangco (TIANGCO), as EVP and Treasurer. Referred to in
the Agreement as AGENT, MJMDC agreed to provide SONZAs services
exclusively to ABS-CBN as talent for radio and television. The Agreement listed
the services SONZA would render to ABS-CBN, as follows:
a. Co-host for Mel & Jay radio program, 8:00 to 10:00 a.m., Mondays to
Fridays;
b. Co-host for Mel & Jay television program, 5:30 to 7:00 p.m., Sundays.[3]
ABS-CBN agreed to pay for SONZAs services a monthly talent fee
of P310,000 for the first year and P317,000 for the second and third year of the
Agreement. ABS-CBN would pay the talent fees on the 10 th and 25th days of the
month.
On 1 April 1996, SONZA wrote a letter to ABS-CBNs President, Eugenio
Lopez III, which reads:
Dear Mr. Lopez,
We would like to call your attention to the Agreement dated May 1994 entered into
by your goodself on behalf of ABS-CBN with our company relative to our talent
JOSE Y. SONZA.
As you are well aware, Mr. Sonza irrevocably resigned in view of recent events
concerning his programs and career. We consider these acts of the station violative
of the Agreement and the station as in breach thereof. In this connection, we
hereby serve notice of rescission of said Agreement at our instance effective as of
date.

Mr. Sonza informed us that he is waiving and renouncing recovery of the

remaining amount stipulated in paragraph 7 of the Agreement but reserves the right
to seek recovery of the other benefits under said Agreement.
Thank you for your attention.
Very truly yours,
(Sgd.)
JOSE Y. SONZA
President and Gen. Manager[4]
On 30 April 1996, SONZA filed a complaint against ABS-CBN before the
Department of Labor and Employment, National Capital Region in Quezon
City. SONZA complained that ABS-CBN did not pay his salaries, separation pay,
service incentive leave pay, 13th month pay, signing bonus, travel allowance and
amounts due under the Employees Stock Option Plan (ESOP).
On 10 July 1996, ABS-CBN filed a Motion to Dismiss on the ground that no
employer-employee relationship existed between the parties. SONZA filed an
Opposition to the motion on 19 July 1996.
Meanwhile, ABS-CBN continued to remit SONZAs monthly talent fees
through his account at PCIBank, Quezon Avenue Branch, Quezon City. In July
1996, ABS-CBN opened a new account with the same bank where ABS-CBN
deposited SONZAs talent fees and other payments due him under the Agreement.
In his Order dated 2 December 1996, the Labor Arbiter[5] denied the motion to
dismiss and directed the parties to file their respective position papers. The Labor
Arbiter ruled:
In this instant case, complainant for having invoked a claim that he was an
employee of respondent company until April 15, 1996 and that he was not paid
certain claims, it is sufficient enough as to confer jurisdiction over the instant case
in this Office. And as to whether or not such claim would entitle complainant to

recover upon the causes of action asserted is a matter to be resolved only after and
as a result of a hearing. Thus, the respondents plea of lack of employer-employee
relationship may be pleaded only as a matter of defense. It behooves upon it the
duty to prove that there really is no employer-employee relationship between it and
the complainant.
The Labor Arbiter then considered the case submitted for resolution. The
parties submitted their position papers on 24 February 1997.
On 11 March 1997, SONZA filed a Reply to Respondents Position Paper with
Motion to Expunge Respondents Annex 4 and Annex 5 from the Records. Annexes
4 and 5 are affidavits of ABS-CBNs witnesses Soccoro Vidanes and Rolando V.
Cruz. These witnesses stated in their affidavits that the prevailing practice in the
television and broadcast industry is to treat talents like SONZA as independent
contractors.

Issue:
THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE NLRCS
DECISION AND REFUSING TO FIND THAT AN EMPLOYER-EMPLOYEE
RELATIONSHIP EXISTED BETWEEN SONZA AND ABS-CBN, DESPITE
THE WEIGHT OF CONTROLLING LAW, JURISPRUDENCE AND EVIDENCE
TO SUPPORT SUCH A FINDING

Held:

Besa v. Trajano 146 SCRA 50

FACTS:
Respondent KAMPI filed a Petition for Certification Election. Petitioner
opposed alleging that there is no ER-EE relationship between Besa and petitioners.
These petitioners are shoe shiners paid on a commission basis. Thequestion of
ER-EE relationship became a primordial consideration in resolving
whether or not the subject shoeshiners have the juridical personality and
standing to present a petition for certification as well as to vote therein.
ISSUE:
W/N ER-EE relationship exists betweem shoe shiners and Besa
HELD:
No.
Piece Worker

Shoe Shiner

1. Paid for work accomplished

1.contributes anything
capital of the employer

2. The employer pays his wages

2.paid directly by his customer

3. Paid for work accomplished

without concern to the profit
derived by employer

3.the proceeds derived from the

trade are divided share with
respondent BESA

4. The employer supervises and

controls his work

4.respondent
control

doesnt

to

the

exercise

Thus, shoe shiners are not employees of the company, but are partners,
because there is no control by the owner and shoe shiners have their own
customers whom they charge a fee and divide the proceeds equally with the owner.

Philippine Long Distance Telephone Company (PLDT) v. National Labor

Relations Commission (NLRC)164 SCRA 671 (1988)
FACTS:
Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone
Company, was accused by two complainants of having demanded and received
from them the total amount of P3,800.00 in consideration of her promise to
facilitate approval of their applications for telephone installation. Investigated and
heard, she was found guilty as charged and accordingly separated from the service.
She went to the Ministry of Labor and Employment claiming she had been illegally
removed. Despite of her being dismissed for cause, (as contended by PLDT) the
labor arbiter (from NLRC) in his decision ruled that the complainant (herein
private respondent)must be given one month pay for every year of service
as financial assistance. The labor arbiter finds the same as equitable, taking into
consideration her long years of service to the company whereby she had
undoubtedly contributed to the success of the company. NOTE: Marilyn Abucay
had served in the company for 10 years. Thus, she must be awarded 10 months
separation pay for every year of her service.
ISSUE:
Whether or not the award of separation pay for the private respondent is just.
RULING:
NO. The rule embodied in the Labor Code is that a person dismissed for cause as
defined therein is not entitled to separation pay. The separation pay, when it was
considered warranted, was required regardless of the nature or degree of the
ground proved, be it mere inefficiency or something graver like immorality or
dishonesty. Separation pay shall be allowed as a measure of social justice only in
those instances where the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral character. Where the reason for
the valid dismissal is, for example, habitual intoxication or an offense involving
moral turpitude, like theft or illicit sexual relations with a fellow worker, the
employer may not be required to give the dismissed employee separation pay, or
financial assistance, or whatever other name it is called, on the ground of social
justice. If the employee who steals from the company is granted separation pay
even as he is validly dismissed, it is not unlikely that he will commit a similar
offense in his next employment because he thinks he can expect a like leniency if

he is again found out. This kind of misplaced compassion is not going to do labor
in general any good as it will encourage the infiltration of its ranks by those who
do not deserve the protection and concern of the Constitution.
Those who invoke social justice may do so only if their hands are clean and their
motives blameless and not simply because they happen to be poor.
We hold that the grant of separation pay in the case at bar is unjustified.
The private respondent has been dismissed for dishonesty, as found by the labor
arbiter and affirmed by the NLRC and as she herself has impliedly admitted. The
fact that she has worked with the PLDT for more than a decade, if it is to be
considered at all, should be taken against her as it reflects a regrettable lack of
loyalty that she should have strengthened instead of betraying during all of her 10
years of service with the company. If regarded as a justification for moderating the
penalty of dismissal, it will actually become a prize for disloyalty, perverting the
meaning of social justice and undermining the efforts of labor to cleanse its ranks
of all undesirables.
Philippine Blooming Mills Employees Organization vs. PBM, 51 SCRA 189
Facts: Philippine Blooming Employees Organization (PBMEO) decided to stage a
mass demonstration in front of Malacaang to express their grievances against the
alleged abuses of the Pasig Police.
After learning about the planned mass demonstration, Philippine Blooming Mills
Inc., called for a meeting with the leaders of the PBMEO. During the meeting, the
planned demonstration was confirmed by the union. But it was stressed out that the
demonstration was not a strike against the company but was in fact an exercise of
the laborers inalienable constitutional right to freedom of expression, freedom of
speech and freedom for petition for redress of grievances.
The company asked them to cancel the demonstration for it would interrupt the
normal course of their business which may result in the loss of revenue. This was
backed up with the threat of the possibility that the workers would lose their jobs if
they pushed through with the rally.

A second meeting took place where the company reiterated their appeal that while
the workers may be allowed to participate, those from the 1st and regular shifts
should not absent themselves to participate, otherwise, they would be dismissed.
Since it was too late to cancel the plan, the rally took place and the officers of the
PBMEO were eventually dismissed for a violation of the No Strike and No
Lockout clause of their Collective Bargaining Agreement.
The lower court decided in favor of the company and the officers of the PBMEO
were found guilty of bargaining in bad faith. Their motion for reconsideration was
subsequently denied by the Court of Industrial Relations for being filed two days
late.
Issue: Whether or not the workers who joined the strike violated the CBA.
Held: No. While the Bill of Rights also protects property rights, the primacy of
human rights over property rights is recognized. Because these freedoms are
"delicate and vulnerable, as well as supremely precious in our society" and the
"threat of sanctions may deter their exercise almost as potently as the actual
application of sanctions," they "need breathing space to survive," permitting
government regulation only "with narrow specificity." Property and property rights
can be lost thru prescription; but human rights are imprescriptible. In the hierarchy
of civil liberties, the rights of free expression and of assembly occupy a preferred
position as they are essential to the preservation and vitality of our civil and
political institutions; and such priority "gives these liberties the sanctity and the
sanction not permitting dubious intrusions."
The freedoms of speech and of the press as well as of peaceful assembly and of
petition for redress of grievances are absolute when directed against public
officials or "when exercised in relation to our right to choose the men and women
by whom we shall be governed.
PAL vs. NLRC 225 SCRA 301
FACTS:

On June 30, 1975, Philippine Airlines hired respondent Raul Diamante as

Integrated Ticket Representative for Bacolod City station.
On April 8, 1988, Edgardo Pineda, Rizalino Cabarloc, Ernesto Subia and Rolando
Velasco went to Bacolod Airport to have their tickets booked for their flight to
Manila on April 9 and 10, 1988. Romeo Vista, a former officemate of Edgardo
Pineda, was their contact person. At the airport, Leticia Vista, wife of Romeo Vista,
introduced Raul Diamante to Edgardo Pineda as the person who could help in the
booking of his ticket. Pineda requested Diamante if he could book their tickets for
the April 8, 1988 flight, particularly Subia, who had to attend an important meeting
in Manila. Diamante answered that all flights for the week were fully booked. He
suggested that he leave with him their tickets. Pineda gave four (4) tickets to
Diamante together with the amount of One Thousand Pesos (P1,000.00) then
Diamante assured them that they will be accommodated. Subia was booked for the
April 8, 1988 flight to Manila while Pineda, Velasco and Cabarloc were booked for
the April 10, 1988 flight. When Subia failed to take the flight due to illness,
Diamante returned Subia's ticket to Vista the following day since it was Diamante's
day off. In order to facilitate Subia's re-booking, Vista asked for the help of her
friend Nelia Cawaling, a neighbor of PAL Station Agent Rodolfo Puentebella. With
the help of Cawaling and Puentebella, Subia was able to take the April 9, 1988
flight to Manila.
Upon their arrival in Manila, on June 20, 1988, Pineda executed an affidavit
charging Diamante with bribery/corruption. On July 08, 1988, petitioner's Bacolod
Branch Manager required Diamante to comment on the affidavit. On July 13, 1988,
Diamante submitted his sworn statement denying the allegations against him.
On July 27, 1988, after evaluation of the complaint and finding the explanation of
Diamante insufficient, petitioner's manager charged Diamante administratively
with bribery/extortion and violation of PAL's Code of Discipline, particularly
Article VIII, Section 1, paragraph 2 thereof, which provides:
"Any employee who directly or indirectly requests or receives any consideration,
share, percentage or commission for himself or for another person in connection
with the performance of his duties."

Thereafter, petitioner convened an ad-hoc Committee on Administrative

Investigation and conducted an investigation. On October 3, 1988, at a clarificatory
hearing of the committee Diamante appeared and was investigated with the
assistance of his counsel, Atty. Allan Zamora, and PALEA representative Mario
Cornelio. During the hearing, it was agreed to reset the hearing on October 24,
1988, to give Diamante a chance to confront Pineda. After several postponements,
there was never a confrontation. No confrontation occurred due to the fact that the
committee unilaterally set the confrontation on November 11, 1988, at Tuguegarao
Airport, Cagayan, despite the previous agreement of the parties and respondent
counsel's request to reset it on November 22, 1988, in Manila. The Committee,
after deliberation, resolved the case on the basis of the evidence on record.
On December 14, 1988, Diamante received a notice of his dismissal from the
service by an office memorandum, dated November 29, 1988.
On January 17, 1989, Diamante filed with the National Labor Relations
Commission, Regional Arbitration Branch No. VI, Bacolod City, a
complaint against Philippine Airlines, Inc. for illegal dismissal, reinstatement with
back wages and damages.
On October 28, 1992, Labor Arbiter Merlin Deloria rendered a decision declaring
the dismissal legal and valid.
On November 26, 1992, Diamante appealed the decision to the National Labor
Relations Commission (NLRC).
On March 18, 1994, the NLRC rendered a decision granting Diamante's appeal and
setting aside the Labor Arbiter's decision and ordering the reinstatement of
Diamante with three years back-wages.
On April 8, 1994, petitioner filed a motion for reconsideration which the NLRC
denied in a resolution dated May 31, 1994.
Hence, this petition.
The principal issue before us is whether respondent was illegally dismissed which
would entitle him to reinstatement with back wages. Petitioner alleges that the

National Labor Relations Commission committed a grave error in ruling that

private respondent was not accorded his full constitutional right to due process of
law.
We reiterate the rule that in certiorari proceedings under Rule 65 of the Revised
Rules of Court, this Court does not assess and weigh the sufficiency of evidence
upon which the labor arbiter and the NLRC based their decisions. Our query is
limited to the determination of whether or not public respondent acted without or
in excess of jurisdiction or with grave abuse of discretion in rendering the assailed
decisions. When the findings of fact of the NLRC contradict those of the labor
arbiter, this Court must of necessity review the records to determine which findings
should be preferred as more conformable to the evidentiary facts.
Regarding the legality of respondent's dismissal, we note that respondent was
found to have violated the Company Code of Discipline. We recognize the right of
an employer to regulate all aspects of employment. This right, aptly called
management prerogative, gives employers the freedom to regulate, according to
their discretion and best judgment, all aspects of employment, including work
assignment, working methods, processes to be followed, working regulations,
transfer of employees, work supervision, lay-off of workers and the discipline,
dismissal and recall of workers. In general, management has the prerogative to
discipline its employees and to impose appropriate penalties on erring workers
pursuant to company rules and regulations.
With respect to the procedural aspect of private respondent's dismissal, he was
given ample opportunity to present his side and to defend himself against the
charges against him. He had every opportunity to be heard. Petitioner sent a letter
dated July 8, 1988, to respondent, requiring him to answer the charges against him.
He participated in the investigation conducted by the company and he appeared
with his counsel on October 3, 1988. After investigation, he was notified of his
dismissal. The fact that respondent Diamante was not able to confront Pineda did
not mean that he was deprived of his right to due process.
The essence of due process is simply an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain one's side. A formal or trial
type hearing is not at all times and in all instances essential to due process, the

requirements of which are satisfied where the parties are afforded fair and
reasonable opportunity to explain their side of the controversy.
Since private respondent's dismissal was for just and valid cause, the order of
public respondent for the reinstatement of private respondent with award of back
wages has no factual and legal basis.
WHEREFORE, the petition is hereby GRANTED. The challenged decision and
resolution of the National Labor Relations Commission are SET ASIDE. In lieu
thereof, the decision of the Labor Arbiter dated October 28, 1992, is AFFIRMED.
No costs.
Calalang vs. Williams, 70 Phil 726
Facts: Pursuant to the power delegated to it by the Legislature, the Director of
Public Works promulgated rules and regulations pertaining to the closure of
Rosario Street and Rizal Avenue to traffic of animal-drawn vehicles for a year in
prohibition against respondent-public officers. Among others, the petitioners aver
that the rules and regulations complained of infringe upon constitutional precept on
the promotion of social justice to insure the well being and economic security of all
people.
Issue: Whether or not the rules and regulation promote social justice.
Held: Yes. The promotion of Social Justice is to be adhered not through a mistaken
sympathy towards any given group.
Social justice is "neither communism, nor despotism, nor atomism, nor anarchy,"
but the humanization of laws and the equalization of social and economic force by
the State so that justice in its rational and objectively secular conception may at
least be approximated. Social justice means the promotion of the welfare of all the
people, the adoption by the Government of measures calculated to insure economic
stability of all the competent elements of society, through the maintenance of a
proper economic and social equilibrium in the interrelations of the members of the
community, constitutionally, through the adoption of measures legally justifiable,

or extra-constitutionally, through the exercise of powers underlying the existence

of all governments on the time-honored principle of salus populi est suprema lex.
Social justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the protection
that should be equally and evenly extended to all groups as a combined force in our
social and economic life, consistent with the fundamental and paramount objective
of the state of promoting the health, comfort and quiet of all persons, and of
bringing about "the greatest good to the greatest number."

Victoriano v Elizalde Rope Workers Union 59 SCRA 54 (1974)

Facts: Plaintiff is a member of the Elizalde Rope Workers Union who later
resigned from his affiliation to the said union by reason of the prohibition of his
religion for its members to become affiliated with any labor organization. The
union has subsisting closed shop agreement in their collective bargaining
agreement with their employer that all permanent employees of the company must
be a member of the union and later was amended by Republic Act No. 3350 with
the provision stating "but such agreement shall not cover members of any religious
sects which prohibit affiliation of their members in any such labor organization"..
By his resignation, the union wrote a letter to the company to separate the plaintiff
from the service after which he was informed by the company that unless he makes
a satisfactory arrangement with the union he will be dismissed from the service.
The union contends that RA 3350 impairs obligation of contract stipulated in their
CBA and discriminatorily favors religious sects in providing exemption to be
affiliated with any labor unions.
Issue: WON RA 3350 impairs the right to form association.
Held: The court held that what the Constitution and the Industrial Peace Act
recognize and guarantee is the "right" to form or join associations which involves
two broad notions, namely: first, liberty or freedom, i.e., the absence of legal
restraint, whereby an employee may act for himself without being prevented by
law; and second, power, whereby an employee may join or refrain from joining an

association. Therefore the right to join a union includes the right to abstain from
joining any union. The exceptions provided by the assailed Republic Act is that
members of said religious sects cannot be compelled or coerced to join labor
unions even when said unions have closed shop agreements with the employers;
that in spite of any closed shop agreement, members of said religious sects cannot
be refused employment or dismissed from their jobs on the sole ground that they
are not members of the collective bargaining union. Thus this exception does not
infringe upon the constitutional provision on freedom of association but instead
reinforces it.
EASTERN SHIPPING LINES, INC., vs. PHILIPPINE OVERSEAS
EMPLOYMENTADMINISTRATION (POEA) 166 SCRA 533, G.R. No.
76633, October 18, 1988Petitioner:
Facts:
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident
in Tokyo, Japan on March 15, 1985.His widow sued for damages under Executive Order No.
797 and Memorandum Circular No. 2of the POEA. The petitioner, as owner of the vessel,
argued that the complaint was cognizable not by the POEA but by the Social Security System
and should have been filed against the State Fund Insurance. The POEA nevertheless assumed
jurisdiction and after considering the position papers of the parties ruled in favour of the
complainant. The petition is DISMISSED, with costs against the petitioner. The temporary
restraining order dated December 10, 1986 is hereby LIFTED. It is so ordered.
Issue:
1. Whether or not the POEA had jurisdiction over the case as the husband was not an overseas
worker.
2. Whether or not the validity of Memorandum Circular No. 2 itself as violative of the principle
of non-delegation of legislative power
Held:
1. Yes. The Philippine Overseas Employment Administration was created under Executive
Order No. 797, promulgated on May 1, 1982, to promote and monitor the overseas
employment of Filipinos and to protect their rights. It replaced the National Seamen Board
created earlier under Article 20 of the Labor Code in 1974. Under Section 4(a) of the said
executive order, the POEA is vested with "original and exclusive jurisdiction over all cases,
including money claims, involving employee-employer relations arising out of or by virtue of

any law or contract involving Filipino contract workers, including seamen." These cases,
according to the 1985Rules and Regulations on Over
seas Employment issued by the POEA, include, claims for death, disability and
other benefits arising out of such employment.
The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made by
the POEA pursuant to its Memorandum Circular No. 2, which became effective on February
1,1984. This circular prescribed a standard contract to be adopted by both foreign and domestic
shipping companies in the hiring of Filipino seamen for overseas employment.2. No.
Memorandum Circular No. 2 is an administrative regulation. The model contract prescribed
thereby has been applied in a significant number of the cases without challenge by the
employer. The power of the POEA (and before it the National Seamen Board) in requiring the
model contract is not unlimited as there is a sufficient standard guiding the delegate in the
exercise of the said authority. That standard is discoverable in the executive order itself which,
in creating the Philippine Overseas Employment Administration, mandated it to protect the
rights of overseas Filipino workers to "fair and equitable employment practices. "GENERAL
RULE: Non-delegation of powers; exception. It is true that legislative discretion as to the
substantive contents of the law cannot be delegated. What can be delegated is the discretion to
determine how the law may be enforced, not what the law shall be. The ascertainment of the
latter subject is a prerogative of the legislature. This prerogative cannot be abdicated or
surrendered by the legislature to the delegate. Two Tests of Valid Delegation of Legislative
Power. There are two accepted tests to determine whether or not there is a valid delegation of
legislative power,
viz
, the completeness test and the sufficient standard test. Under the first test, the law must be
complete in all its terms and conditions when it leaves the legislature such that when it reaches
the delegate the only thing he will have to do is to enforce it. Under the sufficient standard test,
there must be adequate guidelines or stations in the law to map out the boundaries
of the delegates authority and prevent the delegation from running riot.
Both tests are intended to prevent a total transference of legislative authority to the delegate,
who is not allowed to step into the shoes of the legislature and exercise a power essentially
legislative. The delegation of legislative power has become the rule and its non-delegation the
exception.

Virginia G. Neri vs. National Labor Relations Commission, et al.

[224 SCRA 717 July 23, 1993]Facts:

Respondents are sued by two employees of Building Care Corporation, which
provides janitorial and other specific services to various firms, to compel Far Bast
Bank and Trust Company to recognize them as its regular employees and be paid
the same wages which its employees receive. Building Care Corporation (BCC, for
brevity), in the proceedings below, established that it had substantial capitalization
of P1 Million or a stockholders equity of P1.5 Million. Thus the Labor Arbiter
ruled that BCC was only job contracting and that consequently its employees were
not employees of Far East Bank and Trust Company (FEBTC, for brevity). on
appeal, this factual finding was affirmed by respondent National Labor Relations
Commission (NLRC, for brevity). Nevertheless, petitioners insist before us that
BCC is engaged in "labor-only" contracting hence, they conclude, they are
employees of respondent FEBTC. On 28 June 1989, petitioners instituted
complaints against FEBTC and BCC before Regional Arbitration Branch No. 10 of
the Department of Labor and Employment to compel the bank to accept them as
regular employees and for it to pay the differential between the wages being paid
them by BCC and those received by FEBTC employees with similar length of
service.
Issue:
Whether or not BCC is only a job contracting company, hence petitioners are not
regular employees of FEBTC.
SC Ruling:
We cannot sustain the petition. Respondent BCC need not prove that it made
investments in the form of tools, equipment, machineries, work premises, among
others, because it has established that it has sufficient capitalization. The Labor
Arbiter and the NLRC both determined that BCC had a capital stock of P1 million
fully subscribed and paid for. BCC is therefore a highly capitalized venture and
cannot be deemed engaged in "labor-only" contracting. It is well-settled that there
is "labor-only" contracting where: (a) the person supplying workers to an employer
does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others;
and
, (b) the workers recruited and placed by such person are performing activities
which are directly related to the principal business of the employer. Article 106 of

the Labor Code defines "labor-only" contracting thus Art. 106. Contractor
or subcontractor
. . . . There is "labor-only" contracting where the person supplying workers to an
employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and the workers recruited
by such persons are performing activities which are directly related to the principal
business of such employer . . . . (emphasis supplied).Based on the foregoing, BCC
cannot be considered a "labor-only" contractor because it has substantial capital.
While there may be no evidence that it has investment in the form of tools,
equipment, machineries, work premises, among others, it is enough that it has
substantial capital, as was established before the Labor Arbiter as well as the
NLRC. In other words, the law does not require both substantial capital and
investment in the form of tools, equipment, machineries, etc. This is clear from the
use of the conjunction "or". If the intention was to require the contractor to prove
that he has both capital and the requisite investment, then the conjunction "and"
should have been used. But, having established that it has substantial capital, it was
no longer necessary for BCC to further adduce evidence to prove that it does not
fall within the purview of "labor-only" contracting. There is even no need for it to
refute petitioners' contention that the activities they perform are directly related to
the principal business of respondent bank. Even assuming that petitioners were
performing activities directly related to the principal business of the bank, under
the" right of control" test they must still be considered employees of BCC. In the
case of petitioner Neri, it is admitted that FEBTC issued a job description which
detailed her functions as a radio/telex operator. However, a cursory reading of the
job description shows that what was sought to be controlled by FEBTC was
actually the end-result of the task,
that the daily incoming and outgoing telegraphic transfer of funds received and
relayed by her, respectively, tallies with that of the register. The guidelines were
laid down merely to ensure that the desired end-result was achieved. It did not,
however, tell Neri how the radio/telex machine should be operated. More
importantly, under the terms and conditions of the contract, it was BCC alone
which had the power to reassign petitioners. Their deployment to FEBTC was not
subject to the bank's acceptance. Cabelin was promoted to messenger because the
FEBTC branch manager promised BCC that two (2) additional janitors would be
hired from the company if the promotion was to be effected. Furthermore, BCC

was to be paid in lump sum unlike in the situation in Philippine Bank of

Communications where the contractor, CESI, was to be paid at a daily rate on a per
person basis. And, the contract therein stipulated that the CESI was merely to
provide manpower that would render temporary services. In the case at bar, Neri
and Cabelin were to perform specific special services. Consequently, petitioners
cannot be held to be employees of FEBTC as BCC "carries an independent
business" and undertaken the performance of its contract with various clients
according to its "own manner and method, free from the control and supervision"
of its principals in all matters "except as to the results thereof." The Petition for
Certiorari is dismissed.

Lapanday Agricultural Development Corporation v. Court of Appeals [324

SCRA 39, January 31, 2000]
FACTS: Commando Security Service Agency provided security guards to
Lapanday Agricultural Development Corporation under a contract of service.
Subsequently, a wage order was issued, with the stipulation that the increase in
wages for security services would be borne by the client/principal, in this case
Lapanday. The latter refused to amend the contract to conform to the wage order,
and the said contract ran through its natural life and expired, without the required
adjustments having been made. The security agency then filed a case for the
collection of a sum of money with the regional Trial Court that had jurisdiction
over the case. Lapanday opposed, stating the NLRC was the proper forum for the
case.

ISSUE: Where is the proper venue of the case, the RTC or the NLRC?

HELD: The RTC. There was no employer-employee relationship in this case, since
Commando simply sought to collect a sum of money and damages for breach of
contract. The service contract had long since expired. Hence, reference must be
made to the Civil, not Labor Code.

People vs. Panis,142 SCRA 664G.R. Nos. L-58674-77 July 11, 1990
FACTS: Serapio Abug was charged with illegal recruitment. His defense was that
the information filed against him did not constitute an offense because in each of
the four information filed against him, each denote that he was only recruiting one
person whereas the statute requires two or more persons.
ISSUE: Determination of the proper interpretation of Art 13(b) of PD 442/ Labor
Code:
b) Recruitment and placement' refers to any act of canvassing, enlisting,
contracting, transporting, hiring, or procuring workers, and includes referrals,
contract services, promising or advertising for employment, locally or abroad,
whether for profit or not: Provided, That any person or entity which, in any
manner, offers or promises for a fee employment to two or more persons shall be
deemed engaged in recruitment and placement.
HELD: The specification of two or more persons is not to create a condition prior
to filing but rather it states a presumption that the individual is engaged in
recruitment in consideration of a fee, however the number of persons is not an
essential ingredient to the act of recruitment or placement, and it will still qualify
even if only one person has been involved.